STATE CONTROL

Hokitika Guardian, 22 June 1927, Page 4

STATE CONTROL

ITS APPLICATION' TO BA If.WAYS.

A COSTLY LI'XPRY". (R.v TAN BAYER.) 11l tlie (In.vs of niv political youth—manv. many years ago-—I should have laughed to scorn such a .statement as the one made hy the president of the Canadian Pacific Railways a little uliilc ago, in a eonimimication to one oi the business magazines of his own cottidry. The slogan ot my socialist friends the nationalisation of the means of production, transportation and exchange—lntel seemed to me the \eit fonnthition ot just- and ellootive legi.-da-tion and administration. Wider experience and closer ohservation, however have .satisfied me that, human nature hemp; what it is. and politicians what they aVe, it is only in rare instances and in exceptional circumstances that the public can lie as well served in the ordinary activities of lile by •’State Enterprise ’’ as it can by " Private Knterprise.” in the public utility services, so to speak, the Post and Telegraph Department, the Lire and Fire Insurance Departments and the Pubi'ic Trust- Department are the only exceptions to this general rule that (nine readily to mind. The Railway Denartment prohaldv would he ineluded In this li-t ot except ions by many observers, simply because tbe means of transportation must not be left to the whim of individuals and companies: but the experience of older countries lms shown that with adequate safeguards this service may he left safely to private enterprise.

A LESSOX FROM CANADA. In this connection it may ho helpful to examine for a moment what is happening in Canada. The Canadian Pacific .Railway Company owns and operates 20.090 miles of iraok across the Dominion of Canada. The Canadian Government owns and operates 22,000 miles of track (the National' Railways of Canada) across the same wide stretch of territory between the Atlantic and the Pacific Oceans, These two railroads are competitors for the transcontinental and for much of the local transportation business of the Dominion. They Lotli are operated for the basic purpose of making a profit for their owners. The Canadian Pacific is privately owned by its shareholders; the National System is publicly owned hy the taxpayers of the Dominion. The statement of the president of the Canadian Pacific Railway Company, which T have iust mentioned, deals with the

■uteomo of tlie competition between these two great undertakings. “The Canadian Pacific/’ it runs, “is the largest taxpayer 1,1 Canada. Thus, the 'Treater the deficit of the National Railways, the greater the lax-burden on the Canadian Pacific. On the other band, if the National Railways prosper be the diversion of traffic from the Canadian Pacific, the Canadian Pacific’s loss wifi bo greater than the taxes would have been. Again, the greater the Canadian Pacific’s profits, the ''renter will bo its taxes and hence the larger its contribution to its rival. The public enterprise gets the private enterprise coming and going. Through the power of taxation, to meet the cost of Government, private enterprise, private industry and private thrift are compelled to pay for public enterprise, public deficit, public mismanagement and public extravagance.” And notwithstanding all this the Canadian Pacific is regularly paying dividends to its shareholders while the National System is as regu Airly declaring deficits.

EVADi NO EESPONS IIBLITY. , There is no very close resemblance between the railway position in Canada and the railway position in New Zea land ; but here, in spite of tjie absence of competition from any rival system, deficit is following upon deficit with depressing regularity. Since the financial year 1920-2], with the single exception of the year 1023-2!, the expenditure has exceeded the receipts, Mid the year iust. closed will show a i-fi-it of over li’alf a million. Changes ->f management and changes of methods have followed upon one another with almost bewil’dering frequency, and yet none of them seems to have stayed the downward tendency. A couple of years ago the authorities conceived the idea nf charging the losses on the non-pay-ing branch lines to the Consolidated Fund, and Parliament, probably without understanding what the whole business meant, meekly passed a large slice of the troubles of the manage-J incnfc on to the shoulders of tlio taxpayers, great and small, without regard to their ability to pay. In the first year the tax—as (lie “subsidy’* as well may be called—amounted to £359,51(5, in the second to C 445.222, and with the rniVwn.v authorities relieved of responsibility, is not likely to develop a downward trend in the near future. These 11011-paying lines are heritages from former generations of politicians, and the present Government, at any rate, is not responsible for the straits into which they have fallen ; but there still are on the list of railways authorised hy Parliament a number of lines which inevitably would fall into the same category were the nresent Government, or any succeeding Government during the next twenty years, fool isle enough to proceed with their construction. HALF WAY. Tf the sai’e of the State railways is a ton startling proposition for the Dominion to entertain at the present time. Parliament at least might take j some steps, apart from the appoint-1 incut of commissions and the prepare-1 tions of reports, towards the construe- j tion of a scheme of management that would eliminate the importunate politician. restrain the aggressive deputation and fortify the besieged Minister of the Department. Tbe appointment of a highly qualified board, free from ministerial control and with the full powers and responsibilities possessed t,v the management of a privatelyowned railway system would be a long step towards placing the hues on an efficient and a money-earning basis.